Iced tea and breakfast drinks blitz beverage market

The 21st century has not been kind to flavoured carbonated soft drinks, as the number of Australians aged 14 years or older consuming them continues to decline by the year, but Australians are drinking more iced tea and breakfast drinks, according to findings from market research organisation Roy Morgan Research.

Whereas 11,347,000 people (or 71 per cent of the population) drank at least one soft drink in any given four weeks back in 2003, this had fallen to 9,996,000 (52 per cent) by June 2014 — a loss of more than 1,300,000 people. In contrast, Roy Morgan Research found that Australians of all ages and socioeconomic status just could not get enough of iced tea and breakfast drinks.

“We are a nation that loves our food and drink, but when it comes to non-alcoholic beverages our tastes have evolved over the last decade,” said Warren Reid, Group Account Director – Consumer Products, Roy Morgan Research. “Some new drinks varieties have become popular through changing lifestyles, and some as a result of other factors like creative new offerings,” he said.

“The breakfast drinks category has for many years been the sole domain of Up’n’Go, but in the last couple of years we have seen other manufacturers getting in on the action, which suggests that this category is likely to continue to grow,” Mr Reid said.

Iced tea and breakfast drinks increasingly popular

While their market is still much smaller than that of soft drinks, iced tea and breakfast drinks are among the few non-alcoholic beverages to be gaining in popularity with Australian consumers, according to Roy Morgan Research.

In June 2003, 851,000 people (or 5 per cent of the population) drank iced tea and/or breakfast drinks, but by June 2014, this had more than doubled to 2,038,000 people (11 per cent).

Growth mainly from consumers under 50

While consumption of iced tea and breakfast drinks has risen among men and women of all ages, Roy Morgan Research said the growth has been driven primarily by the under-50s.

Between 2003 and 2014, the proportion of young men aged 25–34 who drank iced tea and/or breakfast drinks in an average four weeks shot up from 7 per cent to 15 per cent, while that of women the same age increased from 7 per cent to 14 per cent. The growth among the 35–49 age bracket during this period was even more substantial: from 3 per cent to 10 per cent of men and 4 per cent to 9 per cent of women.

“The popularity of breakfast drinks and Iced Tea is especially prevalent among Generation Z — particularly those who are studying,” Mr Reid said.

“Breakfast drinks consumers are also more likely to agree with the statement ‘I seldom have time for breakfast’, with Gen Z again being above-average in this respect,” Mr Reid said. “This is quite surprising, considering that they are the least likely generation (of working age) to be employed,” he said.

Iced tea and breakfast drink also took off like wildfire across all five socioeconomic quintiles, with the growth being most evident among those from the E quintile, 13 per cent of whom drank these beverages in an average four weeks as of June 2014 (up from 4 per cent in 2010).

“Iced tea is an interesting category, often associated with health benefits, but in actuality the sugar content for most popular brands is comparable with that of regular carbonated soft drinks,” Mr Reid said.

“One key reason for iced tea’s recent growth is that it’s more popular among people born in Asia, the US or Canada than those born in Australia,” Mr Reid said. “Indeed, the number of Asian-born migrants in Australia has increased by almost one million people in the last ten years — indicating that changes in a population’s ethnic mix over time can be a golden (or missed) opportunity for manufacturers,” he said.

Soft drink consumption falling

Conversely, Roy Morgan Research found the the proportion of soft-drink consumers fell among every age group and socioeconomic quintile.

“The decline in carbonated soft drink consumers has hit some brands harder than others. To what degree a brand is affected depends in part on whether it has invested in alternatives such as diet options, as the decline is predominantly coming from regular soft drinks consumers rather than those who drink diet variants,” Mr Reid said.

“The chart shows a drop of 1.3 million soft drink consumers, but when we consider that the population has grown by 3.2 million, the impact on the category is much greater in percentage terms,” Mr Reid said.